Highlights
· Resilient performance in a difficult trading environment
· Headline revenue up 3%; headline operating profit up 2%
· Continued investment in new products and new markets driving growth
· Emerging market sales up from 12.5% to 15% of Group sales
· Good headline margin progression in John Crane, Smiths Medical and Flex-Tek
· Performance improvement initiatives on track in Smiths Detection; improving order book
· Improved headline operating cash conversion at 82% - with free cash-flow of £81m
· Dividend up 4%
"The Group has made good progress despite the challenging economic environment, particularly for businesses serving government-funded customers such as Smiths Detection and Smiths Interconnect, where performance has been disappointing. Remediation in Smiths Detection is on track, although the benefits will be weighted to the second half. Elsewhere, John Crane continues to report strong growth driven by investment in oil and gas infrastructure. Performance at Flex-Tek was encouraging and Smiths Medical has been resilient against a tough trading backdrop. Our results continue to benefit from restructuring initiatives and operational improvements. These savings are being reinvested to build a solid foundation to accelerate medium-term revenue growth.
"We have increased our focus on top-line growth through new product development, sales effectiveness, expansion of our emerging market exposure and targeted acquisitions. The trading environment remains uncertain and sustained pressures on government spending are likely to affect some of our divisions. However, we continue to see further potential to grow sales, drive operational improvements and deliver strong cash conversion. We remain confident of meeting expectations for the full year."
